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THE SITUATION ROOM

Senate Immigration Reform Deal; Skipping Out on Iowa; Tensions Between U.S. and Russia Cooling Down

Aired June 7, 2007 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(STOCK MARKET REPORT)
WOLF BLITZER, HOST: Happening now, the Senate immigration reform deal on life support. A series of votes underway determining if the compromise lives or dies. This hour, the suspense, the stakes and a presidential campaign smack-down in the midst of it all.

Plus, the state of anxiety in Iowa.

Are Rudy Giuliani and John McCain taking the lead-off caucus seriously?

New fallout from the decision to skip an early test of Iowa support.

And tensions between the U.S. and Russia apparently cooling down a little bit. President Bush and President Putin diffusing their dispute over missile defense, at least for now.

I'm Wolf Blitzer.

You're in the in THE SITUATION ROOM.

BLITZER: We begin now with a new thaw in the cold war-like tensions between the U.S. and Russia. It happened today at the G-8 summit in Germany when President Bush and President Vladimir Putin looked one another in the eye.

Our White House correspondent, Suzanne Malveaux, is with the president in Germany -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the two leaders emerged from their much anticipated showdown over missile defense, really, with a surprise here. Russian President Vladimir Putin came out with his own counterproposal, saying essentially that he would cooperate with the United States in this missile defense shield program, but really on Russia's own terms.

President Bush envisions a system like this, where there would actually be a radar that would be placed in the Czech Republic and 10 missile interceptors in Poland. Putin does not approve of this. He believes that this is a threat to Russia's security.

What Putin is suggesting, an alternative here, is that he wants to use an old Soviet built radar system that is already based in Azerbaijan, which he shares with that government. He feels that it would be more control over facing those kinds of threats and actually participating in this system.

Now, this was considered a welcome step forward in actually kind of improving U.S./Russian relations. But also the U.S. government is reacting with a bit of caution.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: He expressed his concerns to me. He is concerned that the missile defense system is not an act that a friend would do. He made some interesting suggestions. As a result of our discussions, we both agreed to have a strategic dialogue, an opportunity to share ideas and concerns between our State Department, Defense Department and military people.

(END VIDEO CLIP)

MALVEAUX: Putin also suggested today that if he got his way, if this the proposal goes through, the cooperation with the U.S. government, that he would no longer need to aim Russian missiles at U.S. military installations or European allies. But, Wolf, this is far from a done deal. As you know, both sides are going to take a look at this in the weeks ahead to see if this is even realistic. We expect that this brinkmanship will definitely continue -- Wolf.

BLITZER: Suzanne Malveaux over at the G-8 summit in Germany.

We'll get more on this story later in THE SITUATION ROOM.

Let's move to the Senate, though, right now.

The fate of a fragile immigration reform compromise is even iffier than before. The bill failed a test vote earlier today and a make or break moment lies ahead.

Let's go to our Congressional correspondent, Dana Bash.

She's watching all of this unfold -- give our viewers, Dana, the latest on what is going on.

DANA BASH, CNN CORRESPONDENT: Well, Wolf, to illustrate the state of immigration in the Senate, I want to put something up on the wall next to me. It's something that the Senate majority leader, Harry Reid, said today. He said, "The bill's over with. The bill's gone."

That, he said, if, in fact, a procedural move that we expect by early evening fails.

Now, this is something that was obviously a tactical move by the Senate majority leader to sway votes as we build up toward that particular vote. But it is also pretty clear at this time that whether or not immigration lives or dies will probably be decided by the end of the day.

(BEGIN VIDEO TAPE)

UNIDENTIFIED MALE: The majority leader? BASH (voice-over): A pessimistic prognosis for the bipartisan immigration bill.

SEN. HARRY REID (D-NV), MAJORITY LEADER: This bill isn't going anyplace, but it's not our fault.

BASH: Senate Democratic leaders want a final immigration vote by week's end. To make that happen, they're trying to limit debate, saying two weeks is enough.

Not fair, say Republicans, who argue senators need more opportunities to change the controversial bill.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: This is no small matter. It's a big issue, a big problem. And it requires broad bipartisan cooperation to bring a bill like this to conclusion.

BASH: Democrats are already warning that a collapse of the immigration compromise crafted with Republicans and the administration would rob President Bush of victory on an issue that tops his agenda.

REID: And the headline is going to be "Democrats vote to continue the bill, Republicans vote against it -- the president fails again.

BASH: But other Senators say they are the ones who will look bad if the highly publicized immigration bill fails.

SEN. TRENT LOTT (R-MS), MINORITY WHIP: If we can't do this, we out to vote to dissolve the Congress and go home and wait for the next election. \

Can we do anything anymore?

Are we men or mice?

Are we going to slither away from this issue and hope for some epiphany to happen?

No. Let's -- let's -- let's legislate. Let's vote.

(END VIDEO TAPE)

BASH: Now, Democrats are making a big public -- public push here today to get the White House to lean on Republicans here in Congress to make this go through, at least to allow this key procedural vote to pass later tonight.

But the hard, cold fact, Wolf, is that the president just doesn't have the kind of influence with fellow Republicans that he once had here on Capitol Hill, especially on this controversial issue of immigration that many conservatives oppose because they simply say it is amnesty for millions of illegal immigrants.

BLITZER: If this is such a big issue for the country right now, Dana, why are the Democrats in such a rush to bring it to a conclusion?

Why not let there be a continuation of the debate for a few more days?

What's on the agenda that is so pressing right now that they have to cut off the debate right now?

BASH: Well, what's next on the agenda, Wolf, is a little bit controversial, because what the Democratic leader says he wants to take up next is a vote of no confidence on the attorney general, Alberto Gonzales. That is a symbolic and, frankly, a partisan move by the Democrats and it is raising some -- the ire of some Republicans.

Senator Trent Lott, the number two Republican in the Senate, said that is irrelevant, non-binding and will do nothing but drive us into a pit of nastiness out here.

So the fact that that is the next agenda item for Democrats is making it more controversial that Democrats want to end this immigration bill. But Democrats also say they have energy and a couple of other issues that they say the American people are ready to hear from the Senate on.

BLITZER: We're going to watch you as the clock ticks. These are crucial hours right now.

Dana, thanks.

Dana is on the Hill for us.

The battle over immigration reform is bleeding over from the Senate floor into the presidential race. A heated clash last night drove home the sharp divisions over this issue and the strong emotions.

Mary Snow is following the fireworks -- Mary, who was involved, specifically, in this floor fight on the Senate floor?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, on one side it was Democrat Barack Obama; on the other, an ally for Republican John McCain.

(BEGIN VIDEO TAPE)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: When you're out there on the campaign trail, you're trying to bring us all together. You're in the trying to make America better.

Why can't be work together?

SNOW (voice-over): That's Senator Lindsey Graham, firing away at Barack Obama without naming him, after the Senator from Illinois introduced an amendment to the immigration bill.

GRAHAM: This is why we can't work together. Because some people, when it comes to the tough decisions, back away because when you talk about bipartisanship, some Americans, on the left and the right, consider it heresy.

SNOW: Obama's proposal targeted the bill's point system, in which the education and work skills of visa applicants would be valued more than a family already living in the U.S.

Obama's amendment could end that plan in five years rather than 14.

When Obama tried to respond, one of his rivals in the race for the White House stepped in.

SEN. BARACK OBAMA (D), ILLINOIS: When the Senator from South Carolina addresses me directly, I feel that it's appropriate for me to respond.

UNIDENTIFIED MALE: I think I can...

SEN. JOHN MCCAIN (R), ARIZONA: The senator from South Carolina...

OBAMA: The senator from...

MCCAIN: ... was speaking in opposition to the amendment.

SNOW: McCain's a Graham ally and an author of the immigration bill.

Moments later, Obama got a chance to defend his bill.

OBAMA: It simply says that we should examine, after five years, whether the program is working. And the notion that somehow that guts the bill or destroys the bill is simply disingenuous and it's engaging in the sort of histrionics that is entirely inappropriate for this debate.

SNOW: But the war of words between Obama and Graham raged on, this time off the floor and off camera. Today, Obama was playing down the argument, telling CNN it really wasn't that big of a deal.

(END VIDEO TAPE)

SNOW: And as for Obama's amendment, two hours after his fight with Graham, his proposal went down to defeat by a vote of 55-42 -- Wolf.

BLITZER: Mary Snow, thank you.

Many of the 2008 presidential candidates are on the fence about immigration reform, saying it's far from being a perfect compromise, the bill on the table right now. Democratic candidates, by and large, have cited some positive aspects of the bill, but they're withholding support until their questions about it are answered.

New Mexico's governor, Bill Richardson, is the only Democratic contender to flatly come out against the measure. Among other things, he cites concerns that provisions about the bill provide families. The Republican contenders are divided by immigration reform. Duncan Hunter, Tom Tancredo, Mitt Romney, Rudy Giuliani, Ron Paul, Tommy Thompson and Jim Gilmore have either voiced strong opposition or have raised red flags. Sam Brownback and Mike Huckabee are more open to the compromise, but they, too, are waiting to see if their concerns about it are addressed.

As an architect of the bill, John McCain is a vocal supporter, but even he acknowledges the bill has some flaws.

Let's go to Jack Cafferty in New York. He's got The Cafferty File -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Wolf, it's democracy in action. It might not be the democracy, though, that President Bush had in mind.

The Iraqi parliament has passed a resolution that requires its government to get permission from the parliament before asking the United Nations to extend the mandate of U.S. troops in Iraq. In other words, the parliament's demanding a say in Iraq about how long our troops stay on Iraqi soil.

According to the Associated Press, those in favor of the measure include the bloc loyal to the radical Shiite cleric, Muqtada al-Sadr, along with Sunni legislators.

Those opposed?

The Shiites and Kurdish backers of Prime Minister Nuri al-Maliki.

For now, it won't likely have much effect, since the U.N. mandate for foreign troops in Iraq has been extended through the end of this calendar year at the request of the al-Maliki government.

But it does show a growing dissatisfaction with the presence of U.S. troops on Iraqi soil, as well as with the al-Maliki government.

In a way, it's reminiscent of the tug-of-war here between President Bush and the Democratic-controlled Congress when it comes to the debate over withdrawing U.S. troops from Iraq.

Meanwhile, the military death toll continues to climb there. Twenty-three of our troops have been killed in Iraq since June 1st.

What's today, the 7th?

That brings the total number of deaths in Iraq -- U.S. deaths -- since the start of the war, 3,502.

Here's the question -- the Iraqi parliament wants a say on any extension of U.S. troops in Iraq.

Do you think they'll get it?

E-mail Caffertyfile@cnn.com or go to cnn.com/caffertyfile. Remember when President Bush said if they ask us to leave, we'll leave?

BLITZER: I remember.

CAFFERTY: They might be getting ready to ask us to leave.

BLITZER: And we'll see if we leave.

CAFFERTY: Yes.

BLITZER: All right, Jack, thanks very much.

Coming up -- the race for presidential campaign cash. There's a new scramble to raise and lower expectations for the next fundraising deadline. We're tracking what we're calling "the spin cycle."

Plus, a new House push in the House for expanded stem cell research in defiance of President Bush.

Is it just for show or could it really pass?

And a long lost letter from Abraham Lincoln. It sheds new light on the frustrations he faced during the Civil War and an opportunity that was missed.

Stay with us.

You're in the in THE SITUATION ROOM.

COMMERCIAL

BLITZER: The presidential candidates are zeroing in on their bottom lines, looking ahead toward a deadline and political expectations.

Our senior political analyst, Bill Schneider, is joining us -- Bill, what's the next big date in this presidential campaign?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: June 30th. That's the deadline for second quarter fundraising.

(BEGIN VIDEO TAPE)

SCHNEIDER (voice-over): Round two of the fundraising battle ends in three weeks. We're now in the spin cycle. The campaigns are leaking documents and spreading rumors to try to spin expectations for themselves and for their competitors.

MARK PRESTON, CNN POLITICAL ANALYST: Campaigns are trying to either lower the expectations for their own candidates or trying to increase the expectations for their opponents. And by doing so, that will help them when the numbers become public.

SCHNEIDER: In the first quarter, were are the big news was the eye-popping totals raised by Hillary Clinton and Barack Obama. The fact that he raised as nearly as much money as Clinton gave his campaign a burst of momentum.

In the Republican race, the big surprise was that Mitt Romney was the frontrunner and that John McCain lagged. In round two, Romney needs to sustain his momentum and McCain needs to show he's turned things around.

There are different ways to score this fight. After round one, Obama boasted a much larger number of individual contributions than Clinton.

PRESTON: The biggest campaigns will talk about how many donors gave to their campaign. It shows how wide their support is across the country.

SCHNEIDER: There's even a score where smaller is better. In round one, the average contribution to the Obama campaign was smaller than that of his competitors. That's better because you can go back to small contributors and ask them for more money. The Edwards Web site mentions that the candidate's birthday is June 10th or 6/10. So it asks for contributions as small as $6.10.

More later.

(END VIDEO TAPE)

SCHNEIDER: In round one, Democrats out-raised Republicans by more than $25 million. And that was demoralizing for Republicans, who are determined to show stronger numbers in round two -- Wolf.

BLITZER: I love this part of the campaign, when everybody is spinning like crazy.

SCHNEIDER: Yes.

BLITZER: And leaks are coming about the other campaigns, trying to make themselves look good, getting ready for the real numbers.

A good report, bill.

SCHNEIDER: Thank you.

BLITZER: Thank you very much for that.

Fundraising on the Internet will be crucial for Democrats looking for a strong second quarter fundraising haul.

Let's bring in our Abbi Tatton -- how important, Abbi, is the online cash, specifically for the Democratic candidates?

ABBI TATTON, CNN CORRESPONDENT: Wolf, it's important because they can bring in such significant funds by tapping into the thousands of small donors out there.

That latest push by John Edwards that Bill Schneider just mentioned -- they're trying to bring in 10,000 new donations, representations of support, online by Sunday. In terms of the first quarter for John Edwards online, it was over $3 million.

For Hillary Clinton, online donations in the first quarter over $4 million.

And for Barack Obama, almost $7 million from 50,000 online donors.

And we had one clue about how Senator Obama might be doing this quarter. His campaign saying in April when they announced their first quarter fundraising totals, they received an online bounce, in 24 hours receiving nearly $500 online.

And now we're seeing, from the Barack Obama campaign, an effort to keep that up. The latest fundraising e-mail from Senator Obama asking people to make a donation and you'll get the chance to win dinner with Senator Obama.

How much the price of admission for that?

Anything you want. They say just $5 if that's all you've got -- Wolf.

BLITZER: Thank you for that, Abbi.

We're going to check back with you shortly.

Still ahead, how far did Vice President Dick Cheney go to get the president's controversial wiretapping program approved?

There are new details and Democratic charges that Cheney left a lot of fingerprints.

Plus, the Iowa straw poll dropouts may pay a price.

Do the voters in the lead-off caucus state feel ignored by John McCain and Rudy Giuliani?

Stick around.

You're in the in THE SITUATION ROOM.

COMMERCIAL

BLITZER: Our Carol Costello is monitoring the wires and keeping an eye on the video feeds coming in from around the world.

She's joining us now from New York with a closer look at some other incoming stories making news -- hi, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf.

Hello to all of you.

South Korea says North Korea has test fired several short-range missiles off its west coast. The launch has come almost two weeks after Pyongyang tested at least one similar missile off of its east coast. South Korea's military considers the test part of its routine military exercise. But the U.S. says it's "not constructive coming at a sensitive time in negotiations to end North Korea's nuclear weapons program."

Saudi Arabia says it's rounded up 11 alleged Al Qaeda members in the past 48 hours. Among those arrested, a man suspected of involvement in a failed attack last year on a major oil facility. Saudi authorities allege the 11 financed and incited terrorism. Saudi forces have been cracking down on extremists linked to Al Qaeda since a wave of attacks in 2003.

A major meat recall has been expanded in 11 Western states because of possible E. coli contamination. United Food Group says it expanded the recall of all ground beef based on concerns by California health services. Officials tell CNN as many as 13 cases of E. coli infection could be linked to this recall. Four people have been admitted to the hospital, with illnesses reported in California, Arizona, Colorado, Wyoming and Utah. The tubes of ground beef were distributed to 13 supermarket chains and sold under several brand names.

Several Democratic lawmakers say they'll try to prevent a House energy plan that seeks to stop California and other states from regulating vehicle emissions. Rick Voucher heads the committee writing the energy plan. He says it's important to have unified regulations for sources of carbon monoxide emissions. But House Speaker Nancy Pelosi says she will not support legislation that limits her state's efforts to reduce greenhouse gases. Pelosi and other Democrats also say they won't back legislation that would limit the EPA's ability to regulation emissions.

And no sooner was she in jail than she was out. Paris Hilton let out of jail and put under house arrest today after serving three days of a three week sentence. Officials in L.A. say she was released for undisclosed medical reasons and that is sparking accusations of preferential treatment.

Al-Sharpton, Al Sharpton, is among those blasting the justice system.

(BEGIN VIDEO CLIP)

REV. AL SHARPTON, NATIONAL ACTION MOVEMENT: If Paris Hilton was a white coal miner's daughter in West Virginia or if she was a platinum selling black hip-hop artist, would she have been treated the same way?

I think this is a glaring example of the disparity in the judicial system in this country.

(END VIDEO CLIP)

COSTELLO: So Paris Hilton is at home, Wolf, and she's wearing one of those bracelets around her ankles to monitor her every move. And she can't leave the mansion.

BLITZER: Thank you very much, Carol, for that.

Carol, we'll check back with you shortly.

Up next, one Democrat says he sees Dick Cheney's fingerprints all over it. That senator and a man who used to work for President Bush are fingering Cheney over the controversial domestic surveillance program. We'll update you on that.

And President Bush says he will not stand for what the House has just done. It involves embryonic stem cell research. In a statement, the president says the House is disregarding protections on human life.

Much more of our coverage, right here in THE SITUATION ROOM.

COMMERCIAL

BLITZER: Happening now, general assessment -- the man President Bush wants as his war adviser says Iraq's government has "a golden opportunity" and that time is running out. We'll tell you what Lieutenant General Doug Lute was referring to in his Senate confirmation hearing.

Meanwhile in Baghdad, violent Sadr City -- someone puts a bomb beneath a parked car near a popular restaurant while many people ate lunch. Five people are dead. Elsewhere, an official tells CNN that a journalist was gunned down in Mosul.

And after four prevents heart attacks, Vice President Dick Cheney keeps up his checkups. Tomorrow, he'll have another here in Washington. His office says it's a scheduled, routine procedure.

I'm Wolf Blitzer.

You're in the in THE SITUATION ROOM.

Right now, a former Bush administration official and some Democrats are pointing the finger at Vice President Dick Cheney for his role in a highly contentious government program.

Our justice correspondent, Kelli Arena, standing by -- Kelli, explain to our viewers what is happening.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, there are new details emerging about Vice President Cheney's role in trying to get the administration's controversial wiretapping program approved back in 2004 by a very reluctant Justice Department.

(BEGIN VIDEOTAPE)

ARENA (voice-over): Democrats say his fingerprints are all over it.

SEN. CHARLES SCHUMER (D), NEW YORK: It hardly comes as a surprise that the vice president was involved, when you look at the record of this administration. ARENA: Following his dramatic testimony last month, former Deputy Attorney General James Comey is fueling speculation it may have been Vice President Cheney who turned the screws in 2004 on a very sick then attorney general, John Ashcroft. That after Justice officials told the White House its classified terror program wasn't legal.

SCHUMER: The vice president ought to come clean and answer the questions.

What did he do?

How much effort did he take?

ARENA: In new written testimony, Comey says he told Cheney on a Tuesday that he was refusing to certify the program.

On Wednesday, then White House Counsel Alberto Gonzales and Chief of Staff Andy Card, were sent to lean on Ashcroft as he lay in a hospital bed.

JAMES COMEY, FORMER DEPUTY ATTORNEY GENERAL: I was very upset. I was angry. I thought I had just witnessed an effort to take advantage of a very sick man.

ARENA: The vice president won't comment. Andrew Card won't comment. Neither will Gonzales.

ALBERTO GONZALES, ATTORNEY GENERAL: I'm not going to comment on Mr. Comey's testimony or talk about the program.

ARENA: Apparently, the vice president just couldn't let it rest. Comey says that Cheney later opposed a promotion for one of his deputies, Patrick Philbin, who was involved in the dispute.

(END VIDEOTAPE)

ARENA: Congressional leaders have asked the Justice Department for more details on that controversial surveillance program. Now, Justice officials already missed one deadline imposed by Congress, and they have yet to respond -- Wolf.

BLITZER: All right, Kelli, thank you.

Kelli Arena is our justice correspondent.

In another major story -- story we're following today, President Bush tells the House of Representatives, no way will he stand for a bill that the House has just passed. It involves a defiant vote on stem cell research in the face of a stern veto threat.

Let's go to our congressional correspondent Andrea Koppel.

Andrea, tell our viewers what -- what the House did and what the president is saying about it. ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Wolf, for the second time since Democrats took power, they are defying President Bush. They are sending him a bill that he has already promised to veto.

(BEGIN VIDEOTAPE)

SEN. HARRY REID (D-NV), MAJORITY LEADER: Today, Speaker Pelosi and I send the bill to the president. And it's not too late for him to do the right thing and sign the bill.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: The bill is passed.

KOPPEL (voice-over): By a vote of 247-176, Democrats and several dozens Republicans pushed through legislation to expand stem cell research -- among those making a personal pitch, Rhode Island Democrat Jim Langevin, paralyzed as a police recruit 27 years ago.

REP. JIM LANGEVIN (D), RHODE ISLAND: That hope of a cure has never been more real than it is today, because of stem cell research.

KOPPEL: But some Republicans accused Democrats of pandering to their party's left flank, forcing a vote, even though President Bush already vetoed a similar bill last year, and promises to do so again.

REP. PETE SESSIONS (R), TEXAS: Their purpose then was the same as it is today, to attempt to score some political points, at the expense of sound science, openness, and transparency.

REP. JAMES MCGOVERN (D), MASSACHUSETTS: This has nothing to do with politics. And it is sad that so many people who oppose this want to politicize this issue. It isn't about politics. It's about life and death.

KOPPEL: The bill's supporters said it could help millions of Americans with diseases like Parkinson's and Alzheimer's by making more embryonic stem cells available for research.

And a recent CNN/Opinion Research poll shows, a majority of Americans are in the Democrats' corner, something Colorado's Diana DeGette, whose 13-year-old daughter, Francesca, has diabetes, predicts could cost Republicans the next time voters go to the polls.

REP. DIANA DEGETTE (D), COLORADO: In the past election in 2006, we won at least two Senate seats in large part because of this research and 14 House seats. Fourteen Democrats replaced anti-stem- cell Republicans.

(END VIDEOTAPE)

KOPPEL: Now, once the president vetoes the bill, over in the Senate, leadership aides on both sides of the aisle say that the override vote would be razor-thin, perhaps falling short by a vote. Over in the House, Republicans are confidently predicting they have the votes there to sustain the president's veto. BLITZER: The president, as you know, Andrea, is suggesting that this potential breakthrough that scientists are now talking about, creating, in effect, the equivalent of embryonic stem cells by another procedure that wouldn't require destroying these human embryos, that that could change this whole debate.

What are they saying on the Hill?

KOPPEL: Well, certainly, it was one of the arguments that we did hear some Republicans mention today, the fact that you could use the -- the -- the skin cells from mice. That was one argument.

But Democrats responded by saying, it's sort of coincidental that, every time there's one of these big votes, we get a big story like this about breakthrough in research on stem cells -- Wolf.

BLITZER: All right, Andrea Koppel, watching this important story for us, thank you.

Coming up: an amazing discovery, a long-lost letter written by President Abraham Lincoln. It's just emerging now. It gives his personal frustrations with the Civil War.

Also: opting out of Iowa. Rudy Giuliani has already announced he will skip a key contest in that important state. Now Giuliani is skipping another Iowa event as well. We will tell you what's going on.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The Rudy Giuliani campaign opens its official Iowa campaign headquarters today. The only thing missing will be the candidate. Rudy Giuliani won't attend. He's campaigning in Michigan, as well as here in Washington.

This comes one day after John McCain joined Giuliani in announcing he would skip a crucial straw poll in Ames, Iowa, this summer.

Let's bring in our senior political correspondent, Candy Crowley.

Why are Giuliani and McCain, Candy, skipping this straw poll in Ames?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: It depends on who you talk to.

The campaigns of Giuliani and McCain will say, look, it would cost upwards of $3 million, maybe even $4 million, to participate in this, because, as you know, they buy tickets for their supporters. They entertain them. They provide the food. They provide the transportation.

And both of them just say it would just be better spent heading toward the Iowa caucuses, not this straw poll.

Now, if you ask the Romney people, they will say, look, they knew that we were going to win this poll, and they want to do this early on, so it doesn't look like they are trying to get out of it.

BLITZER: Do -- but do voters in Iowa see this as a snub? What's -- what's likely to be the impact?

CROWLEY: Well, unclear at this point.

But I can tell you that, in Iowa, there is a perception problem that Giuliani has and that McCain has. McCain, as you know, skipped Iowa last time around -- Giuliani just now opening his campaign headquarters. So, when you talk to people out there in the party and other Republican voters, they will tell you that it is a perception problem, and Iowa voters are pretty squishy at this point. There are not a lot of truly committed voters. So, they could easily swing someplace else.

BLITZER: So, what does it do to the whole straw poll, if the two -- arguably, the two front-runners are not even going to participate?

CROWLEY: It makes it fairly irrelevant. It makes it fairly irrelevant.

And what is happening here is that, for people like Mike Huckabee or Tommy Thompson, who saw Iowa as their place to break out, it becomes sort of less meaningful when the -- two of the top guys aren't there.

It leaves an opening for Fred Thompson, which is sort of interesting. But most people I talked to are not sure that, so soon, he would get into the Iowa straw poll.

BLITZER: Candy, thank you very much.

Candy is watching this for us.

Up next: crunch time for the immigration reform deal.

(BEGIN VIDEO CLIP)

The 12 million that are here today illegally will become 13 million and then 14 million, only making it a bigger problem. This is the time to fix it. We're going to get it done.

(END VIDEO CLIP)

BLITZER: Will Congress get immigration reform done, though? With the deal hanging by a thread right now, Donna Brazile and J.C. Watts, they will place their bets on what happens next.

And later here in THE SITUATION ROOM, the journalist who broke the Watergate scandal story takes on Senator Hillary Clinton. I will ask Carl Bernstein about his new biography, what he learned about the Democratic presidential front-runner. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On life support -- the fate of the plan backed by President Bush to reform U.S. immigration law is in doubt this hour, not good news for President Bush.

On top of that, a new AP/Ipsos poll shows, public approval of the job he's doing matches its all-time low, only 32 percent.

With us now, two CNN political analysts. Donna Brazile is a Democratic strategist. J.C. Watts is a former Republican congressman from Oklahoma.

Why are the Democrats in such a hurry to get this immigration reform bill done? There were no committee hearings. If it's so important to the nation right now, why not let the debate on the Senate floor continue, amendments come up, go down? Why -- what's the rush that the Senate majority leader, Harry -- Harry Reid, has?

DONNA BRAZILE, CNN POLITICAL ANALYST: Because the amendments that they're now putting forward are not to enhance the bill, but it's to destroy the bill.

We have seen 41 amendments over the last two weeks, 28 roll-call votes. The Democrats believe it's time to call the roll and to invoke cloture. Even Trent Lott said that it's -- I don't even want to quote one of the words he used. He said, but enough is enough. It's time to start voting.

They have had two weeks to debate this. They had -- had an entire 109th Congress to debate this issue. It's time to bring this bill to a vote.

BLITZER: What do you think, J.C.?

(CROSSTALK)

BLITZER: I mean, you served in the -- in the Congress for a long time.

J.C. WATTS, CNN POLITICAL ANALYST: Well, Wolf, when a -- when a bill doesn't go through the committee hearings, that's what happens. You -- you get a lot of amendments.

And I don't think that all the amendments are bad. I think the -- the issue that I see here is, I think there needs to be immigration reform. I don't think you secure the border and not doing anything to address the illegals who are in the country. I don't think you address the illegals without doing anything to take care of the porous borders.

And the issue that I have with that is that, if Donna offers a plan, which I think the coalition has, if Donna offers a plan, it's not just enough for me to be against her plan. We see that with the Democrats, who are opposed to the president on the war. They don't come up with a plan of their own.

And I think those Republicans who are against it, they have to say, OK, yes, I'm opposed to Donna's plan, but this is my plan. This is the way I would do it.

BLITZER: Well, you heard Giuliani say that the test of legislation is if it makes it better. And he says he doesn't think this compromise legislation is going to make it better.

WATTS: But you also heard what John McCain said, that this -- if we do nothing, this is de facto amnesty. And, Wolf, it is. I mean, if we do anything, the problem is still unaddressed.

BLITZER: What do you think, Donna?

(CROSSTALK)

BLITZER: You're -- you have got a good sense of what's happening right now. Is it dead, or is it going to survive?

BRAZILE: Well, it's clearly on life support, as you said.

Wolf, S.1348 is not a perfect bill, but it's an opportunity to address the borders, as J.C. mentioned, but also to give the illegal, undocumented workers a pathway to citizenship, to learn English, to work hard, to pay taxes, to get in line, go back home, reapply. That's a tough way to come back into this country.

BLITZER: You heard what lot of conservatives said early on, including Rush Limbaugh and Tom Tancredo, of course. They said, you know, they're going to do to this what they did to the Dubai Ports World proposal that the administration came up with. They are going to kill it.

It looks like they have a good shot of doing exactly that.

WATTS: Well, Wolf, with this bill, it's not midnight, but it is about 11:58.

(LAUGHTER)

WATTS: I mean, it's pretty dark for the bill.

But I -- but I -- I can say that, with -- with -- with Rush and with Tom Tancredo, I agree with them, in terms of saying, let's secure the border. I agree with that. But I think we make a mistake if we stop there and don't go further into the process to say, let's take care of these other problems as well.

Now, are there flaws in the bill?

(CROSSTALK)

WATTS: There are. But I do think, in order to deal with major policy issues like this, you -- you -- it's just reality -- you have got to have broad bipartisan support. BLITZER: Here are these new numbers from the AP/Ipsos poll on President Bush's approval rating. He's at 32 percent approval, 66 percent disapproval.

But, maybe even more significantly, where are things in this country headed? In the right direction, only 21 percent say it's headed in the right direction. Seventy-five percent of the American public, according to this poll, say it's headed in the wrong direction.

If this immigration reform package, which has the president's support, liberal support, Ted Kennedy, John McCain, Jon Kyl, if this collapses, does that mean President Bush, for all practical purposes, has nothing to show what -- has nothing to do, basically, between now and the end of his term?

BRAZILE: Well, most people are predicting that he will become a lame duck some time after September.

I think, if this immigration bill goes down, that that status may become, you know...

WATTS: Those numbers show he's hobbling...

(CROSSTALK)

BRAZILE: Absolutely. He's already hobbling.

Look, there's widespread discontent on Iraq. There's widespread discontent on the war on terror, health care, education, the economy. The president is in deep trouble.

BLITZER: How -- how important is this immigration reform for the president right now, given the enormous amount of prestige he's invested in saying, I got to -- I got to get this done?

WATTS: Well, Wolf, in fairness to the president, the president -- this has been an issue for him all along. He's not a Johnny-come- lately to this issue.

I think the interesting thing -- and I think somewhat sad -- is that, with the president's numbers, he really can't weigh in, because he doesn't have the same clout, I think, with many Republicans that...

(CROSSTALK)

BRAZILE: ... he's still strong with Republicans, J.C.

(CROSSTALK)

WATTS: ... that -- that he would have had. But...

(CROSSTALK)

BLITZER: And the irony is, if he -- if it goes down, it's not going to be because of the Democrats. It's going to be because... BRAZILE: Absolutely.

BLITZER: ... of his fellow Republicans.

WATTS: He's still strong with Republicans.

But Republicans out there in the trenches aren't necessarily, you know, lockstep kind of Republicans. And that's where, you know, he's even lost a little bit with Republicans. He's, you know, gone from maybe, you know, 80 percent to 70 percent.

But nevertheless, he's still lost a little ground with some of those conservatives out there in the trenches as well.

(CROSSTALK)

BRAZILE: He's polling well -- he's polling well with Republicans.

WATTS: He's polling well.

BRAZILE: Only 8 percent of -- only 8 percent Democrats give him a favorable rating, 25 percent of independents.

And there's widespread discontent among women, seniors, and low- income people. So, if the -- if -- this is the last time the president has an opportunity to really impact public policy, I think, in a major way.

BLITZER: All right. We have got to leave it there, guys.

Donna studies those polls. She's looking at those numbers all the time.

BRAZILE: Yes, well...

(LAUGHTER)

BLITZER: Guys, thanks very much, Donna Brazile and J.C. Watts, part of the best political team on television.

A letter from Abraham Lincoln written during the Civil War, this is a fascinating story. We're about to get some new insights into a president frustrated by his generals.

And what if Senator Barack Obama becomes president? We will kick off the first in a series of reports on what the 2008 candidates might do in the White House -- Frank Sesno standing by that for that.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A letter turns up in a lost archive showing the frustrations of President Abraham Lincoln in the middle of the Civil War. Let's bring in CNN's Brian Todd. He's watching this discovery.

What's it all about?

BRIAN TODD, CNN CORRESPONDENT: Wolf, this letter gives us an inside view of a commander in chief in a very difficult war, President Lincoln realizing what's at stake, trying to get his generals to seize on a rare opportunity.

(BEGIN VIDEOTAPE)

TODD (voice-over): Early July 1863, just after the Union's victory at Gettysburg midway through the Civil War.

President Lincoln writes to Major General Henry Halleck, his top official at the War Department. Lincoln wants Halleck to urge the Union's commanding general in Pennsylvania, George Meade, to press the advantage against Robert E. Lee's wounded Confederate Army: "If General Meade can complete his work so gloriously prosecuted thus far by the literal or substantial destruction of Lee's army, the rebellion will be over."

Researcher Trevor Plante who found the letter, says the basic contents were already known secondhand. But finding the original reveals the date and Lincoln's urgency.

TREVOR PLANTE, NATIONAL ARCHIVES: The note expresses Lincoln's optimism that, if Meade could destroy Lee's army, the war would be over. For the next several days, both Halleck and Lincoln implored Meade to fight Lee's army before it crossed the Potomac River.

TODD: But Meade and his exhausted force do not pursue the fleeing Rebels. And, a week latter, Lee escapes.

Lincoln later writes in to General Meade in a letter he never sends: "Your golden opportunity is gone. And I am distressed immeasurably because of it. The war will be prolonged indefinitely."

PLANTE: You can feel Lincoln savoring that the end of the war is within his grasp, and, thus, the great disappointment he had with Meade's failure to deliver.

(END VIDEOTAPE)

TODD: In fact, Lincoln was often frustrated by generals who were not aggressive enough, like General George McClellan. The war continued for nearly two more years after Gettysburg.

When it was all over, more than 600,000 Americans had perished, more than in all of the country's other wars combined. Historians have often wondered how many could have been spared if the war had ended right then after Gettysburg -- Wolf.

BLITZER: Where was this lost letter found, after all these years? TODD: It's one of those amazing stories. It was part of a stack of telegrams and other material that the War Department had sent to the archives 70 years ago. Before that, these letters had been kept in boxes in a garage at the Department of the Interior, of all places.

BLITZER: Fascinating material. I love these stories like that.

Thank you, Brian, very much.

John McCain tops our "Political Radar" today. The senator from Arizona's backing of the immigration bill is costing him support in the crucial early primary state of South Carolina.

The county chairman, who was backing McCain, quit today, partially, he says because of McCain's support of the bill. But the McCain campaign says it still has strong support in South Carolina.

He's a backer of the president when it comes to the war in Iraq, but Mitt Romney rejects the administration's vision of a long-term U.S. military commitment in Iraq. The former Massachusetts governor tells the Associated Press -- and I'm quoting now -- "Our objective would not be a Korea-type setting, with 20,000 to 50,000 troops on a near permanent basis remaining in bases in Iraq."

Lots of sunshine for Rudy Giuliani and Hillary Clinton -- the senator from New York has a double-digit lead over her presidential rivals in a new poll of Florida Democrats. On the Republican side, the former New York City mayor is far ahead of other GOP candidates in this Quinnipiac University poll.

But look who's in second place among Republicans. It's Fred Thompson. The former senator from Tennessee has taken a crucial first step towards jumping into the race for the White House. We will hear a lot more from him in the coming days and weeks.

Remember, for the latest political news at any time, you can always check out our Political Ticker at CNN.com/ticker.

Let's go back to Jack Cafferty in New York -- hi, Jack.

JACK CAFFERTY, CNN ANCHOR: How you doing, Wolf?

You know, if Hillary and Rudy hold those positions, get the nominations and wind up in the election as the candidates for president, it will set up the race that never happened in the state of New York, but was supposed to.

Giuliani was going to run for the Senate against Hillary Clinton, but was diagnosed with prostate cancer, and had to withdraw. The polls at the time indicated he would have beat her. If that race had happened, and Rudy had won, how things might have changed. But I guess we will never know.

Anyway, our question is -- the Iraqi parliament wants a say in how long U.S. troops remain in Iraq. Our question is: Do you think they're going to get that say? Richard in Texas writes: "Jack, if the Iraqi legislators vote to ask U.S. troops to leave, it's doubtful President Bush would pay any more attention to them than he does to the U.S. Congress."

Jim writes: "Sure, Jack. And let's give Japan, Germany, and Korea the same opportunity to vote."

Nick in Pennsylvania: "It's clear the Iraqi government cannot be held together without our troops being there, because then the insurgents would have a new target: them. I don't think they have the will or belief in themselves to accomplish anything positive. And, unfortunately, that translates to our being there for some time to come."

James in Pennsylvania: "No. If we're going to leave, why are we building huge permanent military bases in Iraq? Soon, we will forget all about Iraq. The invasion of Iran will be under way."

Jay in Minnesota: "The Iraqi parliament should not have a say in whether U.S. troops stay or go, until they can stop worrying about their summer vacations and start running the country."

Leo in California: "No, but President Bush will come up with some rhetoric that gives the illusion that they will have some input."

And Robert in Las Vegas: "Jack, not likely. We all know Bush, Cheney, and Halliburton call the shots. It's funny, though. The people of Iraq and America all say it's time for U.S. involvement to end. God bless the 300 -- 3,502 souls. I wonder when some common sense will prevail in all this" -- Wolf.

BLITZER: Jack, thank you.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: President Putin makes a surprise summit offer to President Bush. Will it help the U.S. and Russia stand down from their missile standoff?

He once wrote that homosexuality is unnatural and unhealthy.

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